EXHIBIT 5-3 Best Buy Co., Inc.* Merchandising Firm Consolidated Balance Sheets $
ID: 2383989 • Letter: E
Question
EXHIBIT 5-3 Best Buy Co., Inc.*
Merchandising Firm
Consolidated Balance Sheets
$ in millions, except per share and share amounts
February 26,
2011
February 27,
2010
ASSETS
Current Assets
Cash and cash equivalents $ 1,103 $ 1,826
Short-term investments 22 90
Receivables 2,348 2,020
Merchandise inventories 5,897 5,486
Other current assets 1,103 1,144
Total current assets 10,473 10,566
Property and Equipment
Land and buildings 766 757
Leasehold improvements 2,318 2,154
Fixtures and equipment 4,701 4,447
Property under capital lease 120 95
7,905 7,453
Less accumulated depreciation 4,082 3,383
Net property and equipment 3,823 4,070
Goodwill 2,454 2,452
Tradenames, Net 133 159
Customer Relationships, Net 203 279
Equity and Other Investments 328 324
Other Assets 435 452
Total Assets $17,849 $18,302
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 4,894 $ 5,276
February 26,
2011
February 27,
2010
Unredeemed gift card liabilities 474 463
Accrued compensation and related expenses 570 544
Accrued liabilities 1,471 1,681
Accrued income taxes 256 316
Short-term debt 557 663
Current portion of long-term debt 441 35
Total current liabilities 8,663 8,978
Long-Term Liabilities 1,183 1,256
Long-Term Debt 711 1,104
Equity
Best Buy Co., Inc. Shareholders’ Equity
Preferred stock, $1.00 par value: Authorized—
400,000 shares; Issued and outstanding—none —– —–
Common stock, $0.10 par value: Authorized—
1.0 billion shares; Issued and outstanding—
392,590,000 and 418,815,000 shares, respectively 39 42
Additional paid-in capital 18 441
Retained earnings 6,372 5,797
Accumulated other comprehensive income 173 40
Total Best Buy Co., Inc. shareholders’ equity 6,602 6,320
Noncontrolling interests 690 644
Total equity 7,292 6,964
Total Liabilities and Equity $17,849 $18,302
Consolidated Statements of Earnings
$ in millions, except per share amounts
Fiscal Years Ended
February 26,
2011
February 27,
2010
February 28,
2009
Revenue $50,272 $49,694 $45,015
Cost of goods sold 37,611 37,534 34,017
Restructuring charges – cost of goods sold 24 —– —–
Gross profit 12,637 12,160 10,998
Selling, general and administrative expenses 10,325 9,873 8,984
Restructuring charges 198 52 78
Goodwill and tradename impairment —– —– 66
Operating income 2,114 2,235 1,870
Other income (expense)
Investment income and other 51 54 35
Investment impairment —– —– (111)
Interest expense (87) (94) (94)
Earnings before income tax expense and equity in
income of affiliates 2,078 2,195 1,700
Income tax expense 714 802 674
Equity in income of affiliates 2 1 7
Net earnings including noncontrolling interests 1,366 $ 1,394 $ 1,033
Net earnings attributable to noncontrolling interests (89) (77) (30)
Net earnings attributable to Best Buy Co., Inc. $ 1,277 $ 1,317 $ 1,003
Earnings per share attributable to Best Buy Co., Inc.
Basic $ 3.14 $ 3.16 $ 2.43
Diluted $ 3.08 $ 3.10 $ 2.39
Weighted-average common shares outstanding (in
millions)
Basic 406.1 416.8 412.5
Diluted 416.5 427.5 422.9
P 5-1 Best Buy Co., Inc.’s consolidated balance sheets from its 2011 annual report are presented in Exhibit 5-3. Required a. Using the balance sheets, prepare a vertical common-size analysis for 2011 and 2010. Use total assets as a base b. Using the balance sheets, prepare a horizontal common-size analysis for 2011 and 2010. Use 2010 as the base. c. Comment on significant trends that appear in (a) and (b).Explanation / Answer
Ans
Vertical Common size Statements Details 2011 2011 AS a % to total Assets 2010 2010 AS a % to total Assets Assets Current Assets Cash and Cash equivalents 1,103.00 6% 1,826.00 10% Short term Investments 22.00 0% 90.00 0% Receivables 2,348.00 13% 2,020.00 11% Merchandise Inventory 5,897.00 33% 5,486.00 30% Other Current Assets 1,103.00 6% 1,144.00 6% Total Current Assets 10,473.00 59% 10,566.00 58% Property and Equipment Land and buildings 766.00 4% 757.00 4% Leasehold improvements 2,318.00 13% 2,154.00 12% Fixtures and equipment 4,701.00 26% 4,447.00 24% Property under capital lease 120.00 1% 95.00 1% Less Accumulated Depreciation -4,082.00 -23% -3,383.00 -18% Net property and equipment 3,823.00 21% 4,070.00 22% Goodwill 2,454 14% 2,452 13% Tradenames, Net 133 1% 159 1% Customer Relationships, Net 203 1% 279 2% Equity and Other Investments 328 2% 324 2% Other Assets 435 2% 452 2% 3,553 20% 3,666 20% Total Assets 17,849.00 100% 18,302.00 100% Acconts Payable 4894 27% 5276 29% Unredeemed gift card liabilities 474 3% 463 3% Accrued compensation and related expenses 570 3% 544 3% Accrued liabilities 1,471 8% 1,681 9% Accrued Income Taxes 256 1% 316 2% Short-term debt 557 3% 663 4% Current portion of long-term debt 441 2% 35 0% Total current liabilities 8663 49% 8978 49% Long Term Liabilities 1183 7% 1256 7% Long Term Debt 711 4% 1104 6% 1894 11% 2360 13% Common Stock 39 0% 42 0% Additional Paid in capital 18 0% 441 2% Retained Earnings 6372 36% 5797 32% Accumulated other comprehensive income 173 1% 40 0% Non Controlling Interest 690 4% 644 4% 7292 41% 6964 38% Total Liabilities and Equity 17849 100% 18302 100%Related Questions
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